Pammie57

I had a participant ask me if she could add/get a Power of Attorney for her husband to call about her 401(k) account. Is that a possibility? I know he is encouraging her to take a loan of 50% of her vested balance. I know he encouraged her to stop contributing at all... I have never had a participant ask me that before. Thoughts?

from a previous post - it is my new understanding that ANY retirement plan (not just 401k) that allows participants to self-direct must provide a default investment and must issue the notice to participants "describing this investment"...long term - it should be a target date fund or a balanced fund? What if the plan allows for 100% open ended investments and the broker holds the participant contribution/funds in a liquid cash fund/bank sweep account until they receive instructions from the participant? For example - I have a plan with Charles Schwab and that is what I was told. There is no balanced fund or target fund set up as the default. What if any type of QDIA notice should go out? I am uncertain at this point. Thanks!

It is my understanding that a sole prop's or a partners earned income is determined as of the last day of their tax year - does his/her deferral $$$$ have to be in by that last day or do they get any kind of a grace period (beyond 7 business days) is it just the election that has to be made by 12/31 (or whatever) and then $$$ can go in as soon as possible or is there a hard and fast guideline on the deposit date.

does a profit sharing plan (not 401k) that allows for participant self -direction need to provide a QDIA and the notice?

Thank you so much for the checklist!

Does anyone have a good checklist for determining exactly what notices and disclosures have to be sent out before year end? I know there is safe harbor notice and several others, but need a good guide to make sure I don't miss something and cause a client to get penalized. thanks.

I just picked up a 9/30/2015 plan and the compensation listed for owners was 265000 - so I was wondering if that is correct or if the compensation is based on the year the plan began - as in 260000?

we have a 401(k) plan effective 7/1/2014 - the owner makes well over 260,000 - isn't his compensation limited to 130,000 and are his contributions limits halved as well? We think his Safe harbor 3% is based on the 130,000 but an actuary says he is able to receive 52,000 total in contributions for 2014. Im researching, but need some feedback and cites if possible. Thanks.

Per plan document - first year was a SPY - Sept 1 through Dec 31, 2014. Not retroactive to 1/1. Thanks for your replies.

is there any relief for a plan that started late in 2014 and didn't realize they would be required to get an audit due to large plan status until after year end? they do have over 120 eligible participants and have not engaged an auditor as of today for their 2014 pye. Plan started in September with calendar year end.

If a small plan has Schedule A information - must they file the 5500 instead of the 5500-SF? just can't remember.

If a plan document limits deferrals to 50% of compensation, and a participant makes $36,000 but is catch-up eligible - and wants to contribute the max she can - would she be able to defer 18000 plus the 6000 for catch up or would she be limited to just 18,000 for 2015?

We have several small 401(k) plans whose investments are with Sterne Agee; each participant gets a monthly statement. Yet we do quarterly summaries and participant statements for them as well. Is this necessary since they do get their own statements with detail information on gains/contributions/fees? Doesn't the plan sponsor just have to disclose annually (or possibly every 14 months now) what fees could be charged for things like distributions, loans, brokerage acct fees, etc? I am a little confused on all the fee disclosure requirements now.

My plan has AUL group annuity and they furnished the Schedule A and D information. I cannot remember whether I have to file those schedules with the SF form - I know that on the SF form Part V- 10e asks about commissions. If I fill that in, is the Schedule A unnecessary? D? Thanks.

Yep I realized after I posted that she can't single out catch-up -...would have to change deferral percentage or change amount per paycheck on the 1/1 or 7/1 date to reduce total deferrals.

I just had a client email me with this question: "I am trying to find out if Catch-Up contributions can be changed anytime during a plan year. I found where we elected to have Catch-Up contributions, but find nowhere that states a specific date if someone should want to increase or decrease their Catch-Up contribution. Is it correct to say that a Catch-Up contribution amount can be changed at anytime through a plan year?" The plan document says " Participants may modify deferral elections on 1st day of PY and 1st day of 7th month of PY" - What I am not sure of is how they would specifically modify the catch up amount - just reduce their percentage or dollar amount for all deferrals? What am I missing here?

Believe me - I checked in 2013 to make sure there was no receivable, and all of the $ 23,496 was received in 2014. However, I think he is undermatched...so I am pondering if perhaps the excess is really match...waiting to get that K-1 to confirm that his compensation is definitely enough to get the full 5% match. Currently, he only has $7500 as his matching contribution....and 260000 x 5% is 13,000. My brain might be slightly fried, but I can't think of a limit that would exceed...comments?

He only works for one company - doesn't get a W-2 - gets a K-1 and he makes well over 260,000 so we use that comp figure (still waiting on K-1) ...we found the error when reconciling the assets, and there was no prior year receivable. Deferral amount deposited was 23496. thanks for the input!

Thanks Austin - groovy of you to answer....but not groovy that he is taxed twice, but I know you are right.

An owner exceeded the 402(g) limits in 2014 by 496....he also had to take an RMD of over $4000 - which he did in December 2014. I want to make sure that since you can't use a corrective distribution to satisfy a RMD - that he can't use part of the $4000 to say that the excess was distributed. I can't find exact back-up, so would like to be sure before I advise them to distribute the excess of 496 plus earnings (I know he missed the April 15 deadline)....thanks.

Thanks Tom - I had read something about doing the amendment, but does that create 2 sets of eligibility requirements? does that change coverage test/ ADP test or anything else I need to know about?

If a client let an ineligible employee Defer- is the accepted correction to return the deferral plus earnings or do they forfeit the def and match-and make them whole outside the plan?